Texas Hurricane Losses: When Crop Insurance Won’t Help – DTN

Round modules hanging on at ravaged yard at Bayside Gin in Texas, post-Harvey.

Many cotton farmers in eastern and southern Texas were anticipating a strong crop this year, only to see their hopes washed away by Hurricane Harvey. Now they’re trying to salvage what’s left of their crops.

After coming ashore in Texas on the night of Friday, Aug. 25, Harvey became the strongest hurricane to hit the U.S. in more than a decade. Residents of Texas in the path of the storm were told to evacuate due to the catastrophic flooding that was expected. In Bay City, Texas, (in Matagorda County) a mandatory evacuation was ordered on Sunday, Aug. 27, “due to the severe flooding of every structure in Bay City.”

Bay City resident Robby Reed told me that, on his farm, he lost more than 400 of his 725 acres of cotton, worth an estimated half-million dollars. He told me that his crop insurance was not going to help because he had already met his guarantee yield with cotton he harvested prior to Harvey. “This was my best cotton crop year ever before the hurricane hit,” said Reed.

Reed farms a total of 2,500 acres of land, which includes cotton, rice, milo, corn and sometimes soybeans. Once the rains came, the fields that Reed had not harvested were at the mercy of the storm, which damaged what was once a bumper crop. While most of the corn had been harvested prior to the storm, only about 70% of the cotton in Matagorda County had been harvested.

I spoke to Reed on Sept. 6 while he was attempting to pick the cotton that was left standing. He told me that his home was filled with 4 feet of water, and while he did have flood insurance, he was still left with a “big mess.”

I mentioned that I was hearing cotton was being condemned in the field. Reed said, “There was a rumor about the cotton, more about the seed rather than the lint.” (Cotton lint is the fiber taken from the seed after it has been ginned.)

“If the cotton can go through the gin, it can be ginned. A lot of the seed in the cotton that has not been picked (before Harvey) has sprouted or rotted. The cotton seed is used for a bunch of different things (feed, oil, meal, oil, to name a few), and it usually pays for my cost of ginning. So, it’s going to cost more to have it ginned without having good seed.”

Harvey destroyed everything in its path either from hurricane-force winds and/or record flooding that covered Houston and surrounding communities. Farmers lost harvested bales of cotton that were blown apart by the winds, along with cotton and other crops still sitting unharvested that were flooded by the rains.

TEXAS FARM BUREAU: TOO SOON TO KNOW FULL EXTENT OF LOSSES

Gene Hall, director of public relations at the Texas Farm Bureau (TFB) told me that, “Agri-Life Extension released a preliminary estimate last week. They stated that the loss for cotton in the hurricane zone could be as much as 400,000 bales — a devastating blow. Crop insurance will not cover all of that. The Corpus Christi classing office had projected the Gulf Coast cotton crop at 2 million bales. That would have been one of the best in recent years.”

That’s bittersweet for cotton farmers who have seen a tough couple of years, according to Hall. “Prices have been low and costs high. Many farmers were counting on the high yields from this crop. For some, it may mean going out of the cotton business. Difficult decisions are ahead.”

“Everything left on the stalk has to be considered a near-total loss,” said Hall. “Since harvest was still underway, we know that many cotton modules — large packages of unprocessed cotton waiting for ginning – were left in the field or in gin yards. They are typically covered by a tarp, waiting for the gin to be ready for them. We know many modules had those tarps blow off and the modules ruined by wind and rain. It’s unlikely that much will be salvaged.”

Hall said that 98% of the crop had been harvested near Corpus Christi. Less of the harvest was complete as you move north in the disaster area. Matagorda County was probably only about 70% complete, and Wharton County was maybe less than 40%. “It will likely be weeks before we have any reliable estimates as to actual losses,” he added.

“Our field staff in the area tell me that most ranchers got their livestock moved before (Harvey made) landfall,” said Hall. “The only nice thing about a hurricane is you know it is coming. But since the storm was unprecedented, we know that some of them were caught by surprise. There have been cattle lost and still stranded. Some have been moved. Impossible to know how many at this point.”

Hall also told me that the rice situation is “bad enough,” though not as severe as cotton. “I was told by a member of our rice committee that there was about 10% to 20% of first-crop rice left in the field around Beaumont. Some may be salvaged, but not if the mature heads were submerged. I think it’s real dicey to predict how it will affect second-crop rice.”

“Farmers and ranchers have lost homes like their neighbors. Many of them have also seen their livelihood severely impacted,” said Hall. “TFB has launched the Hurricane Harvey Relief Fund for Agriculture, focusing on the damages suffered by the farm and ranch families damaged by Hurricane Harvey.”